There is always more money to be made. But if that’s the case, then why do so few catalogers upsell (offer customers an item similar to but more expensive than the item they’re buying) or cross-sell (suggest a complementary purchase, such as a belt to go with a pair of pants) online? According to a December survey by Chicago-based e-commerce consultancy the E-Tailing Group, only 48% cross-sell on their Websites, and a scant 24% upsell. This is a paltry number, considering that a company can convert at least 50% of those upsell attempts into sales, says E-Tailing Group president Lauren Freedman.
“Catalogers can place [upsells and cross-sells] in the shopping cart to tempt shoppers,” Freedman says. “All upselling is a form of promoting impulse buys.”
The logistics of suggestive selling — which includes upselling and cross-selling — can be tricky. For starters, “a cataloger might have to choose from 15,000 or more products in its database to find the items that might work as an upsell,” Freedman says. It also depends on “what products are appropriate for the season, what category they’re promoting it in, and the average price points on the Website,” she adds.
Catalogers can have their merchandise buying team select appropriate upsell/cross-sell items or choose a software program to help them. EDatCat shopping cart software, which sells for $350, enables catalogers to promote upsells on a product page, but the cataloger must manually input the SKUs of the items to be upsold. A software program such as IBM’s Net.Analysis program not only facilitates the inputting and placement of the upsells and cross-sells but it also designates certain items as prime candidates for suggestive selling. It’s a bit pricey, however: Net.Analysis starts at $25,000.
ONE CATALOGER’S UPSELLING SUCCESS “There are two avenues we could have taken to implement upselling,” says Rachel Pappert, director of e-commerce for Boca Raton, FL-based women’s apparel cataloger Boston Proper. “We could have used collaborative filtering software, which chooses upsell products based on what other items previous buyers of a particular item have bought,” Pappert says. For example, if a previous purchaser of a book on dogs had also bought a certain book on cats, Amazon’s software might suggest the same cat book to another dog-book buyer. (For more on collaborative filtering, see “You’re Gonna Love This,” April 2000 I.Merchant.)
That tactic could backfire, though, if the first buyer had bought the cat book as a gift, and most of the subsequent buyers of dog books loathed cats. For that reason, Boston Proper’s team of buyers handpick appropriate items to be cross-sold or upsold. These products are then “poured” into the database via custom software. “It’s powerful for us to be able to say to our customers that the products we’re suggesting were chosen by experts.” Pappert says. “It lends credibility to our business.”
Since implementing the selling program, Boston Proper’s online average order size has grown to roughly $200 — about $15 higher than the average catalog order size, Pappert says. “It’s much easier to upsell online than in the catalog, since you don’t have space restrictions.”
THE RULES Freedman suggests catalogers consider the following when upselling online:
Create a merchandising plan to determine what type of products to suggestive sell and their locations on the site, during both peak and nonpeak selling seasons.
Understand what sells well online vs. offline.
Test in multiple site locations. “Product page selections are most effective, because if customers have gone all the way to a product page, they’re seriously thinking about purchasing an item, and an upsell will have more relevancy then.”
|86%||offer gift suggestions|
|82%||promote sales or specials|
|54%||feature “we recommend” items|
|38%||feature “editors choice” items|